According to data issued from Legal & General?s (L&G) Mortgage Purchase Index, 87 per cent of residential borrowers opted for a fixed mortgage rate during the second quarter of 2009. This compares with the 71 per cent opting for fixed mortgages during the first quarter.
The figures, cited by a Telegraph.co.uk article, are the result of a trend analysis using mortgage applications made through the Legal & General Mortgage Club. An average two-year fixed rate increase to 5.46 per cent from 4.78 per cent in the first quarter was also found.
Although the average fixed rates over three, five and 10 years all showed a downward trend, the recent rise provides hope of a positive projection for the mortgage market.
Stephen Smith, a Legal & General representative, said: ?Fixed rates had been offering the full package until recently ? they had been getting cheaper and they offer valuable peace of mind in a turbulent and uncertain environment.? According to Mr Smith, variable rates have not been very popular with borrowers, particularly in the light of the current mortgage climate. The margins on such products also tend to be high and trending upwards.
Mr Smith also noted that the credit crunch is entering a new phase, with fixed-rate pricing that may have reached the bottom. The implication is that buyers would do well to take mortgages before the rates increase in response to market recovery.
As an indication of such a trend, lenders such as the Nationwide Building Society, Barclays and Abbey have already increased their fixed-rate mortgage costs.
